The real stories from inside the F1 paddock

Time to look at the F1 business model?

The German Grand Prix was an interesting race, but what was most interesting (apart from the whereabouts of Bernie Ecclestone) was why there were so few fans in the grandstands. Hockenheim is the second largest sports stadium in Europe (after the Nürburgring) and boasts 120,000 seats. On Sunday, however, only 59,000 of these had bottoms in them, (although there were one or two fairly large bottoms spotted, so there may have been some encroachment on the 61,000 empty seats).

To put it another way, Hockenheim was half-filled. And that is worrying. Europe is the middle of some fairly major economic hardship, but Germany has been one of the strongest economies up to now. Admittedly, on Monday the credit rating agency Moody warned Germany about its AAA credit rating and lowered its outlook from “stable” to “negative”, but for the man on the street in Germany there are none of the privations that have been seen in countries such as Greece, Italy, Spain and, to a lesser extent, France. It was no great surprise to see small crowds in Barcelona and Valencia this year. Last week Valencia became the first Spanish autonomous community to apply for help from the Spanish government’s new €18 billion rescue fund. Valencia needs to repay €2.85 billion in loans by the end of the year. Catalonia is rumoured to be on the verge of following suit. One out of every four Spaniards are unemployed, but under the age of 25 that figure rises to 52 percent.

The crowd in Hockenheim (or rather the lack of it) was disconcerting for a number of reasons. Germany boasts five F1 driver and two former World Champions. F1 racing has been very entertaining this year. Hockenheim is no more remote than Silverstone; the traffic management is better than at most tracks and the circuit design is good enogh to provide overtaking.

So why is there a problem?

The conclusion that one reaches is that the ticket prices must be too high when compared to the experience the fans enjoy. This is very bad news. With modern communications technology, fans can now sit at home and watch the racing and see such things as live timing, from the comfort of their own homes. They do not need to worry about endless queues, muddy puddles and overpriced food and drink. It does not make sense for them to buy tickets.

To a large extent, this is due to the Formula One business model, which extracts all possible revenues from the circuits. They cannot easily cover their costs and so have to rely on public investment to survive. But this also means that they struggle to maintain their fixed assets, which naturally deteriorate over time. This means that the fan experience is not as good as it could be. We have seen many circuits simply give up on F1, others have run into financial trouble. Race promoters try to justify their high ticket prices by saying that they must charge this much in order to pay the fees required by the Formula One group. The result of this is that fans look at the Formula One group as being exploitative. The teams are not happy because they feel they should get more than they do. The circuits feel exploited and the fans pay the bills. No-one is happy, apart from the investors in the Formula One group.

There is as a result very little incentive for promoters to get involved in F1, unless the race serves a specific purpose for the government involved. F1 can buy you prestige, but the countries that want prestige are perhaps not the best places for a sport to be seen.

The only series that one can really use to compare business models is NASCAR in the United States of America. This operates in a very different fashion. The sanctioning body does all the marketing of TV rights (as with F1), but it divides up the money very differently. It gives 65 percent of its TV revenues to the circuits, 25 percent to the teams and keeps 10 percent for itself. The circuit promoters are allowed to earn additional revenues through sales of tickets, sponsorships, VIP hospitality, concessions, and merchandise. They, however, then share this money with the teams, offering substantial prize money funds, which boosts team revenues. Like in F1, the teams add to their revenues by selling sponsorships and merchandise. This means that circuits work hard to keep NASCAR happy, because it is in their interest to do so. This fee structure makes track ownership attractive and there is no need for government help, except perhaps when it comes to access roads. This means that the governments get the economic impact for free, which makes the sport popular with the authorities. The NASCAR brand is thus associated with success and tracks want to buy into it. The France family, which controls NASCAR, is also in control of the International Speedway Corporation (ISC), which owns around half the tracks that are used. They thus make more money. They are careful not to have too many venues and have a strong rival in Bruton Smith’s Speedway Motorsports, Inc (SMI) and there are even one of two independent operators still in business. What this means is that the incentives are all aligned and all the businesses are stronger as a result. Most importantly, however, tracks have the money they need to provide good facilities. They can afford to build plenty of grandstands and thus can charge reasonable prices for tickets. There is also money for upkeep and improvements and the circuits are always working on better concessions, better comfort, additional entertainment facilities, better access and even such things as exhibition centres, museums and shopping malls.

Given the state of the finances of some of the F1 tracks these days, buying a string of F1 venues would not be that difficult. You cannot buy Monaco, but who is to stop the Formula One group buying Monza, Spa or even the Nurburgring and Hockenheim and then turning them around by being nice to the fans, rather than driving them away?

In F1 circles the thought-process usually rejects ideas that they did not think about, but it might be wise to look at the NASCAR model and see the advantages it brings.

Don’t be grumpy Joe why shouldn’t he feel helpless in the face of Bernies money machine. Great article thanks – sums up the attendance issue completely and loads of replies in similar vein – I haven’t been for many years and although I am planning to go to Monaco and Spa some time on my ‘bucket list ‘ it would seem both (particularly Monaco) will cost the price of a good two week holiday for 4 – and the TV coverage is great (when available on BBC – I am still not going to pay Rupert for the privilege)

Now who’s being cynical! Looking the response to your article I would say there’s a few unhappy fans out there Joe. I’m one of many who have from time to time commented on the poor facilities at races, high ticket prices and so forth. These days I ‘vote with my feet’, watching at home (feet up). Everything you say makes sense of course. In this day and age I object to ‘slumming it’ – why it assumed that all race fans want burgers and chips for example while not too far away invited (non-paying) guests are eating decent food and wine? I hate burgers! The sport should cater for all tastes and budgets and all age groups.

Don’t want to appear cynical or blunt but F1 as a whole has never really cared about the fans. Never has done (certainly in my days of attending GPs throughout Europe) and probably never will. I think that the fans SHOULD have the power to influence and vote with their feet but it just doesn’t seem to work like that. I always felt like an ‘inconvenience’ as a fan when I went racing several times a year. I don’t go anymore. A quaint idea? Spot on. It’s only ever been about one thing – money. AT F3 or BTCC I felt ‘wanted’, ‘part of it’ (another ‘quaint’ idea I can hear Joe saying!) but not at F1; never. Frank WIlliams summed it up best when asked whether F1 is business or sport? For 2 hours on a Sunday – sport; the rest of the time it’s business. A business of course doesn’t have ‘fans’ as such however, it does have customers. Having said that, I never felt like a customer – only an inconvenience. I really don’t think that F1’s fanbase is on the agenda of F1’s top brass.

Well said! I’d love to take my family to silverstone (my nearest) Or Spa, or almost anywhere else… but race day tickets for 2, adult and 3 kids, lets just say that I can get a lot more for my money than F1… As you have said elsewhere, that doesn’t say much for the next generation of fans either.

Of course, we then ask the question why Indy will be half full this weekend for its NASCAR race, right? And how most other tracks have long ago downsized then number of seats, in many cases back to the level of the late 1990’s, in order to have so many empty seats?

There is an issue beyond mere economic downturn. The reality is that IndyCar, NASCAR and yes, even F1, seem to have lost the younger audience. When I attend a race, there seems to be few under age 30, and the average age seems to be over age 50.

The real danger is that once fans get away from the tradition of attending their local race, it is tough to get them back. And once its venue no longer has the crowd energy that goes with a sold-out venue, the excitement for the show is tough to reclaim as well.

The important point is that more young people are indifferent to cars and to driving. They don’t care if they drive and don’t want to own a car or even have a license. Before you get them into racing you have to get them interested in cars as something other than expensive pollution machines.

I agree, but McLaren’s recent foray into the animated realm was less than grand. The animation was professional enough, but the writing was sub-par and the humor was forced.

It reminded me of nothing so much as the industrial films that firms produce about themselves. Even if they hire professional writers, any creativity is typically destroyed by the inevitable corporate review committees.

They slash jokes and make terrible recommendations (mandates). Whatever remains is, at best – very mildly amusing and wholly disjointed. If McLaren want to seriously go after the youth crowd with film, they need to hire a firm with a good reputation for humor and let them fly free. McLaren knows cars, but no one would ever accuse McLaren of having a handle on funny.

Have you heard about the new “F1 Race Star’s” game that Codemasters will be releasing on all major gaming platforms in November? It’s basically F1 meets Mario Kart. Could be a masterstroke in order to attract a younger audience.

I take your point, S.B., especially when it comes to teenagers/young 20-somethings who may be a bit more “radical” and green and therefore react against cars in general to some degree.

However, I think Joe’s point about getting them enthused when they are young – younger than teen-age – is right – and very possible. I drive a 50-year-old car as my daily driver and SO MANY kids shout out “Nice car!” to me, or “look at that!” to their mother or father.

Not direct evidence, it’s true, but kids like cars. They really do (at least in my experience).

If F1 was ever actually PROMOTED rather than just put on with a rather “take it or leave it” attitude, then maybe there might be a whole load of things different in future.

I have a young son. He enjoys the “Cars” movies and he likes toy race cars. However, give him a choice between watching an F1 race and a NASCAR demolition derby, and he’ll choose stock cars (it kills me). To be fair, he is exposed to NASCAR all the time in the USA, and there is little reinforcement of F1 after the broadcast. That said, getting him to love F1 is going to take some effort. A child is far more enthralled by carnage and fist-shaking than a killer two-stop strategy.

Sky have got it right in the UK with regards to constant promotion and features all throughout the week.

If only a) it wasn’t constant repeats and grainy footage of classic grand prix (I don’t believe they have the rights to any footage from the 2000s onwards) and b) it wasn’t behind a paywall in an economic downturn

That’s a very good point, SB. There was an article in one of my local newspapers recently that talked about how the teens nowadays just don’t have the enthusiasm for driving that there once was. It used to be that most teens would get their licence the day they turned 16 (or very shortly after) so that they could drive their parents cars around to go see their friends. It was a sign of independence. A right of passage. It was one of the most important things to look forward to as a teen. This right of passage has now been replaced by the iphone…

Could be a sociological shift, or perhaps the cost of running a car (gas, insurance, etc) that the parents are more reluctant to pay for nowadays?

It’s a circle. The tickets are too expensive for ‘the kids’ has Joe put it just then.
If you’re over 50 and have worked your way up through the ranks and have a decent job then like the average F1 fan you probably are now without a mortgage, no kids to buy school uniforms for etc… and so you have disposable income. Hence $200 for a ticket is okay.

People like I (18-25) bracket aren’t going because $200 is crazy and way over almost everything else.

In Australia here I can go to the footy to see my favourite team play for 30 bucks with decent seats near the goals (AFL). I can go to the Aussie Open for less than 100 and that include seats at Rod Laver Arena where all the best players end up playing. That includes by the way 3 matches. 1 of the mens is easily longer than an F1 race.

Concert tickets can easily even be less than F1 to get similiar seats.

And that’s all before you factor in my generations appeal to the ‘now’ vote. I want the live timtings NOW, I want to see it as I watch the GP now, I want to have commentary and as much stuff here for my enjoyment of the race now!

Older people didn’t have the live timings on the internet back in there day and have grown up without it. My generation don’t tend to go for things they have to wait in ques for. ticketmaster or ticketek allow you to buy tickets online from home. TV gives us coverage. I’m sure without much effort I could find a way to get Free practice sessions online as well if I had to time to watch them.

In my opinion the reason why F1 is losing younger people is because it doesn’t cater at all to there needs. If it provided an app that you could login with using your ticket number or code and then have live timings there over a wifi (free for ticket purchases) at each event and also streaming several cameras onboard (leader, driver who did last fastest lap, and local driver say) also through the app then people would go.

We don’t get the onboard in Australia. If they offered it and so you could experience it and follow it no matter whihc part of the track you were on, and just get a better first person experience for the better seats then it would be way more exciting for me and people my age.

Something costing that much should give us a much better experience than watching it for free at home. Instead it’s worse experience for a lot of money we don’t have.

Half full at Indy is still about 130,000 people. Or basically double what Hockenheim drew. There are a number of reasons as do why, mainly the debacle in 2008 when the Goodyear tires couldn’t hold up, the heat in late July in Indiana, the poor racing even by NASCAR standards it produces.

Yes, there was that debacle (I was there). Still, the attendance decline at Indy is not alone — Michigan, for instance, used to sell out 2 shows @ 153,000 per show, now it struggles to sell out 2 shows at 100,000 people per show. Heck, even Bristol is struggling to sell tickets. And if you travel through the southern USA, you’re hard-pressed to see any NASCAR-theme “activation” advertising, even deep into the heart of traditional places (Hickory, Dansville, most of North Carolina, etc).

But it still leaves the fact that it used to be full to capacity. Hence there is a downward trend in attendence despite the success. Consider that there are more people in the world now… it does not look good. Sure… it is a success, but it is less successful now than it has been.

Joe, your post resonates strongly with me. I live 30 mins drive from Silverstone yet I haven’t attended for several years. I remain a passionate F1 fan but the cost:benefit ratio just isn’t there. To take my family of 5 costs about £500 as I recall. And for that I don’t get a seat; rather I must arrive at the crack of dawn and lug a bunch of folding chairs and three kids halfway around the circuit to sit on some gravel hoping the people 10 rows ahead don’t put up their huge flags and obscure the view.

Far more civilised to watch the excellent tv footage.

However I note that it looked pretty full at Silverstone yet again this year – despite the problems. So if the Brits still go, even in bad weather and poor economic climes what is the Silverstone secret and how does the rest of Europe copy it?

I think they key is that Briish F1 fans a) accept to the weather and b) care more about the sport as a whole and seem less affiliated to our national drivers (heck, our papers love to slate them) and teams (of which nearly all are British at heart).

NIce read and some good points made. You mention about the ticket prices, well you can throw in with that the prices of things once inside the event, I find it scandalous the price of food and drink, even a programme to keep up with the days events. General admission at Silverstone (without checking) £100 for the weekend?? You can easily spend that again just keeping yourself fed and watered!

Canada is one of the cheapest F1 races, but I’ll head out to a regional weekend or ALMS long before I shell out the cash to go see F1. It’s just far too expensive for me when I know I can see some good racing for much cheaper. With ALMS at Mosport, I can snoop around the paddock and check out the cars (I’m an aero nerd, so I like that), I can walk to any corner or straight to watch, and it’s considerably cheaper.

Now, if a weekend F1 low-level grandstand ticket was in the $100 range, I might consider it. General admission would need to be around the $60-75 range. Any more than that, and I’ll happily just head down to the local Italian cafe filled with Ferrari posters to watch the GP. I can’t even be bothered to buy cable/satellite for my TV. Besides, the cafe offers great lattes, good atmosphere, and it’s not $300-500 to watch the race!

It’s the price of tickets that’s killing F1 for spectators. The general admission and crap grandstands are too expensive for general sports fans.

And as a “super” fan, I’m in the lucky position of living in Spain, so I can travel to a number of Grands Prix, but I just can’t afford to do it “properly” with a decent grandstand seat on the start / finish line. I have to limit myself to one GP a year. For example, two weekend passes to The Italian GP on the start / finish line is over €1000.

Having recently done Valencia on the “cheap” with a grandstand that was facing the beach, I’d actually much rather watch a race on the TV.

I fully agree with the costs being the limiting factor. I was extremely excited to have F1 come to Korea, but after seeing the debacle in progress the first year, and then looking at the ticket prices, I decided to save for the next year. Same thing again in 2011.
The prices are MUCH lower this year, and since it’s probably going to be the last race in Korea, we decided to finally go because I know I’ll never be able to afford to go to any other F1 race, even Japan.

BTW, if you think it is costly for a fan to attend an F1 race, just try to cover it as a local motorsports journalist. And even then, because of the way that F1 operates, the chances of getting high-quality original content is virtually zero if you’re not a long-standing member of “the circus.” So, no local press, no non-motorsports press, and even diminished motor sports press coverage. (BTW, the same applies for MotoGP.) On top of that, promotional efforts are discouraged because F1 doesn’t want to associate itself with Bob’s Bar and Grill, or even Fortune 100 international companies, unless fees are paid. And voila! you have 100,000 show up at Indy, and Bernie wondered why it wasn’t sold out at (245,000 seats)???

Could you give us some insight on what it costs a real journalist to cover F1 properly? I’d guess $10,000 US per race average.
BTW-I’m glad you drive to a lot of the races. I love reading about your travels!

Doesn’t this make a case for TV-only races, such as a Ricard race (i.e., sans grandstands)? The flaw in the NASCAR argument is that it, too, is suffering from an attendance decline at certain circuits. The difference is that when you get to a NASCAR race, there’s value.

Excellent post Joe! The NASCAR business model is much more effective. I do not care for the product but I have friends that do and they have no problem visiting a track or two per year. That’s what F1 needs… a fan that will go to 2 races not just sacrifice to make it to one venue every so many years until they no longer do. I’ve been to Montreal a few times and it is outstanding but the ticket prices will keep me away for good. While I can afford it, I would rather save the $446 plus travel fees and watch it on my big screen tv at home with my friends and all the food and beverage I want. Now if it was $99, I would be at Montreal & Austin this year!

BTW. I hear that Bernie wanted $25 million for the sanctioning fee, or roughly $250 per fan. IF F1 takes all of the TV revenue, I’m wondering how Indy (or any other venue) breaks even w/o tax subsidies? And we all know that tax subsidies are not happening in the USA or most of Europe in the near future.

Uh, yeah, I know that F1 doesn’t go to Indy, spending a couple of weeks or so there pretty much every year. Dude, give me some credit here. Just saying that Bernie wanted $25 million for F1 at Indy, which was about $250 for every fan in attendance, and if you think that there are 100,000 fans who will pay that amount to watch a (boring) F1 race at Indy, you’ve been smoking too much of Indy’s leading cash crop! And Bernie’s suggestion was to get Indiana, or Indianapolis (governments) to pay for the fee!?!?!!? Bernie also found out that he wasn’t as powerful in the USA — in fact, the Speedway (Indiana) fire marshal showed a little courage, if that story is true.

You make all too much sense Joe, which in F1 usually means it won’t happen. The problem comes down willingness to change from the management and as long as CVC and FOM are making enormous amounts of money nothing will change. You have pointed it out time after time, the commercial rights holders are only interested in money, they dont care where it comes from as long as it keeps flowing in.

I would argue that the change in business model that is required is really the ownership of the commercial rights, the interests of the CR holders should be aligned with that of the teams, venues and the sport in general. At this point all they do is exploit the sport without giving anything back and that is not a sustainable model. This myopic view of the sport by CVC is also leaving a lot of revenue untapped with their reluctance to properly venture into the possibilities that the internet and new media provide.

The best thing to happen would be for the FIA or the teams (or a combination thereof) to buy back the CR and run the sport in a manner that provider all the actors in the sport to make a proper business out of it….sadly this will never happen

CVC’s view is that of an investment company – their job is to make money for their shareholders.

The key question is why Max & Bernie were allowed to negotiate their 100-year deal and whether JT will be successful in negotiating out of it, as that’s the only way anything can change. Short of refusing to give official FIA sanction to the championship unless the 100-year deal is dropped, I can’t imagine he has any other clout.

I do not doubt this. They should never had been sold the company. But they were. The question I want to know the answer to is why they have done nothing. Their investors are clean-living American pension funds, with white picket fences and no dodgy business. Surely these people will be frightened away by dealing with people who are mentioned in bribery cases. Of course, the investors probably don’t know anything about this, but if I was CVC I would have wobbly knees.

Cos it’s an old boys club, Max and Bernie (in my eyes) are like two old school mates, you scratch my back etc etc. It’s a complete joke. I can’t imagine Bernie even thinks in passing of how the deal would be for the fans who attend and get to look across the track at a pit wall, let alone let into the pit lane, unless you’re spending your monthly salary.

You are right Joe, in a way it does not make sense for me to buy tickets. I can get most of what I want from the telly. The last time I went to a GP was Silverstone 06, camped for three days had a great time with the lads, but the race in a way just zoomed by as I could’nt follow the whole thing as I could on the TV. I’m getting old and have decided if its going to rain I ain’t going, but I do admire those who braved it this year. (BTW I nearly got hypothermia at Donnington watching Rossi win in the wet on the bikes, and I’m not doing that again)

Also, Mike Doodson remembers Silverstone 78 in GP+. So do I. First time I take the girlfriend to a motor race having convinced her it is going to be great, I stand ankle deep in mud in the pissing rain for 5 hours, she sits in car, not happy. Get back to car, it’s in 6 inches of water, stuck. I push she drives, I’m utterly, utterly soaked, head to toe in mud. Car keeps stopping all the way back to London being completely waterlogged. Girlfriend did marry me by the way, but she has never been to another motor race.

Maybe the lack of bums on seats at Hockenheim has something to do with choice. The German motor racing fan would rather watch the excellent DTM racing, where the seat prices are much lower (e.g. Hockenheim €31 for a Silver Grandstand seat for the Sunday €125 for a family ticket for the whole week-end). The racing is probably just as enjoyable, the players are more familiar to the fans and they know a German car is going to win.

As Joe points out – Germany is not only the largest and strongest economy in Europe, this season features 5 German drivers and 2 German world champions. On top of all that, this is Formula One’s most competitive championship in decades.

In previous years, this would have added up to a German GP sold out months in advance. The fact that the German grandstands were half empty should send the warning klaxons BLARING throughout the sport. Though probably not in Bernie’s offices. Bernie’s a short timer and so are his corporate masters. Both will be gone or sold up within the decade, perhaps far sooner. They have no financial incentive to care that they’re killing the sport.

It is the teams that need to be worried. It is the teams that need to take control of their destiny. Formula One is diminishing before their eyes. Youth are not watching, either on TV or in person. Without youth, the sport will recede to ever decreasing significance.

If the sport continues on this path, it will soon be one of those sports that most youth didn’t even realize still exist, like boxing and horse racing.

Very insightful post. The current commercial rights holders simply have different incentives than the sport’s long-term stakeholders (which include the fans). The commercial rights holders–Ecclestone and the other owners of FOM–have short term investment horizons which leads them to maximize revenue now at the expense of long-term revenue growth. Contrast that to how the France family runs NASCAR. As Joe points out, NASCAR runs by a different model, but there is plenty of evidence that family-run firms tend to have longer investment horizons. Also consider how Ecclestone built F1 into the commercial success that it is when he was a younger man with perhaps a longer-term perspective.

Unless incentives are changed, F1 will not take the steps that need to be taken. That means getting ownership stakes into the hands of those with a long-term interest in the sport. The teams were one possibility that occurred to me, but Joe makes a good point about the circuit owners as well. The FIA would be another party, but that organization will not take an ownership stake (and probably should not as the rules maker). But, the FIA should be the “change agent” that pushes for the commercial rights ownership moving toward persons and entities with a longer-term vested interest in the sport.

The F1 ‘Sport’ is enormously popular, but that is because of the TV and internet coverage, not people going to a circuit (with exceptions for Silverstone et al)

Like many others on here, I’d not even ‘think’ about going to a GP, here or in Europe as the costs are just too much for what is a day or weekend trip out.

I take a large diesel engine to shows in the UK and Holland, and for what I would be charged for two of us to go to Silverstone, I can go to Nuenen in Holland, have a great weekend with minimal costs and come back refreshed and having had a good break. That includes a nice relaxing ferry trip each way.

We live 30 miles from Silverstone.

It isn’t only the costs at the entrance to the circuit, you need to eat and drink and maybe buy a momento, the prices of which at the end of the weekend leave you thinking that someone, somewhere is just ripping you off.

With kids, it just gets worse, as the additional costs just take the whole thing out of the reach of most families..

I feel very sorry for those who are locked into high concession prices at these circuits, it must be very awkward trying to make your money out of the event when you’ve had such high initial costs. Customer resistance to high food and drink prices means that many traders may well have lost money on the Silverstone weekend as folks just refused to pay stupid money.

The answer has to be better financial control over what is charged and who pockets the profits. The teams, FIA, FOM & CVC need to realise that this current recession is going to wipe out a lot of discretionary spending for many fans, and the Hockenheim circuit is just a foretaste of what is to come.

Ultimately, and as has been said many times before, they will kill the Goose that has laid the Golden Eggs for so long.

Really good article Joe, as usual. I often wonder what will happen when Bernie leaves his post and someone else takes over. Will the model remian the same? It is difficult for a promoter to make money because of the fees Bernie charges and because Bernie takes a large chunck of what could be made from the track.

Let me try and explain how it going to be handled here in Texas. We have what is called a Major Event Trust Fund, METF. This fund was created a few years back when someone in Texas wanted to know why so many large sporting events were passing up on coming to Texas. The fund, which pays back to a community that hosts one of these large events the sales tax gained from the event itself. In other words, when people come to Austin in November and spend money those sales tax dollars are put into the METF and at the end of the event an audit is completed to see if the event, in fact, did generate the economic impact it said it would. The economic impact is what’s driving everything here. We all know how much money is spent at these large events. Example: The USGP is suppose to bring in ~$288 million dollars to Austin in economic impact, a portion of that will be given back as an incentive.

Ticket prices at CoTA are higher compared to other venues (I don’t really know because this November will be my first F1 race) but seem very reasonable given the economy here.

Your assertion that there will be a post event audit is terribly misinformed.

The reason there has been so much controversy in Texas is because the Texas Comptroller of Public Accounts produced a false and error filled original estimate. That is why the City of Austin refused to endorse the race with their required municipal contribution and why the Circuit of the Americas had to pick up the city share themselves.

The current economic impact statement produced for the event overstates economic activity eligible for the METF by possibly as much as $250,000,000.

Mates, I don’t know what they call it across the pond, but here in Texas we call it crony pork. The Comptroller’s support of Formula One was and is a scheme to build the Texas billionaire Red McCombs a special purpose sports and entertainment facility currently known as the Circuit of the Americas.
In polling undertaken in 2011 by a city council candidate, the citizens of Austin expressed strong disapproval of Formula One by a two to one margin.

Nothing against Formula One or racing generally, just not here in Austin and not with public funds. We need our tax coffers for schools and other operations of government. The citizens of Austin would appreciate if you would not attend.

If “Audits'” post, civil enough, is a harbinger of anti-F1 Austinites invading your blog, … then be prepared for a moderator’s ordeal. The contingent of naysayers who populated the comments at statesman.com, the Austin newspaper site, were among the crudest, most hateful of collectives I’ve seen. It seemed as though all the Austin dirt bar counters and holding cells were given Web access. F1 fans and supporters, being sharp-witted and not pansies, sometimes responded in kind and it got very ugly. I’ll be watching nj.com (New Jersey) in the coming year to to see if many of their locals get similarly nasty over the Grand Prix of America.

some are knocking Silverstone but there were 80,000 of us there on the Friday, 90,000 Saturday, 125,000, Sunday-the campsites were rammed on the Thursday afternoon as well! what are Silverstone’s general prices compared to Hockenheim , and if comparable, what’s Silverstone doing right?

In the days of Schumacher romping the field there were as much fans at Hockenheim as there are at Silverstone, actually there’s a whole load of good camping sites around the track with free bus rides to get on track too. Nürburgring used to be the same and many came to Spa as well.

But given that Vettel is now at the top, Schumi is back and the fans still don’t come its not about not having Germans there, its not about Camping and I would say its not about money compared to other races either (just this weekend we discussed with friends who got a 500 GBP offer for the whole weekend, including travel from the UK and bedding).

It really is eerie how great venues like both the German races, and Spa are lacking people to come and see the action live on track. It really shows F1 is giving fans a bad deal there.

Here’s my dreamt-of scenario for shocking F1 into reform. Now that IndyCar has emerged from the ruinous management of Tony George, it has potential to resume the ascendancy it enjoyed as CART. Pre-IRL, it was superb racing and worried F1 so much that Bernie threatened surcharges on any F1 track that ran them. I’m sure there are Brits who still brag about seeing A.J. Foyt win the ’78 CART race at Silverstone. For the time being, I want IndyCar to forget about overtaking NASCAR domestically, and instead expand its brand globally. As they’re not as demanding of the circuits, structurally or financially, they could run on venues abandoned by F1. Who wouldn’t love to see, for a reasonable price, powerful world-class single-seaters return to Brands, Zandvoort, the A1 Ring, Imola, Clermont-Ferrand, Anderstorp. If that succeeds, a mutiny by existing F1 circuits could ensue, as there’d be somewhere to go. Ergo, incentive for F1 to reform. Maybe even to merge, or at least form an alliance, with IndyCar.

What are you smoking Anthony? IndyCar is toast. The fans have rejected their series for many reasons, mostly because it’s race cars are butt ugly, slower then a 5 year old Formula Atlantic chassis on the current road/street courses and handle like a truck generally. Why would F1 and the rest of the motoring world want to align themselves with failure? Stop drinking the crapwagon kool aid served up by rodeo boy. Try suggesting a fix for F1 instead of a sly request for Europe to help out a failed American open wheel concept.

You forgot to mention how boring and sterile Indy is now. I recorded this year’s Indy race as I haven’t seen one since I moved to Korea in 2003, but turned it off less than one-quarter of the way into the race.

Try watching the IndyCar Mid-Ohio race Aug. 5. I don’t know if the race’ll be good; some are, some aren’t. I thought Castroneves vs Sato at Alberta was gripping. But Aug. 5 you’d see a glimpse into the past of F1; single-seater power and speed in a beauteous natural setting, as at the circuits I cited. Maybe those who can even remember those days are vanishing. I hear those who dismiss IndyCar as basically saying “I don’t care if open-wheel racing becomes extinct in the USA.” Maybe you’re NASCAR supporters in disguise. Getting back to the point: why should FOM change if there’s no competition. My suggestion for a competitor is a longshot but I thought we valued dreams.

USGP is going to cost me $299 for a reserved seat for myself. I would have liked to have to wife tag along, but at that price it would be a waste to spend that much on something she’s not all that interested in. If I was close enough to drive, I would have probably paid $180 for general admission and sit in a folding chair and would have brought her along. But I have to pay $300 a night for hotel that normally costs less than a third of that price, and $1200 to fly down to Austin. This will probably be the only GP I will attend in my life unless the costs come way down .

nail on the head about ticket prices, last gp i went to was spa about 15 years ago, cost 50 odd quid on the gate for a bronze seat. i wouldnt agree that watching it on tv is an equal alternative, being there is a different experience. i would say though that its always been the case that as a race, f1 is better watched on tv, and now with live timing and pit cam etc its much better from a sports viewer pov. its not like cricket or football (equally rip offy) where it all happens in front of you. in an average stand at a race, you only see about 10% of anything that actually happens live. from a value perspective, probably the roc is about as good as it gets. or a rally of course, nice and free

Hi Joe – I’ve been a long-time reader of your blog, but never commented before. I wanted to comment on two aspects to your post – the cost of attending a GP weekend and the linked issue of the appeal to a “younger” generation.

My brother and I went for the first time this year to the British GP in Silverstone. We’re both in our mid- to late- 20’s, and grew up watching Nigel Mansell and Damon Hill in the 1990’s. We had general admission tickets for the weekend (£155 plus £6 postage) and camped at the official campsite (£60). We also ordered Fanvision sets to make sense of what was happening (£65). So, this leaves us with a bill of £286 each – before you factor in transport and food and drink costs.

This was a real treat for us, but if I’m honest, we felt fairly badly done out of the experience. To have spent just under £300 each for the privilege of standing in mud and rain, with a MUCH less good view of the action and MUCH less sense of what was going on in than if we’d watched the race on TV – just fundamentally didn’t feel worth it. There is also a real sense at the circuit of the privilege that the “important” people have access to that’s out of bounds for you. We stood at the Club / Vale corner, which is opposite the hospitality tent for the Paddock club, and spent much of Sunday watching a steady stream of helicopters dropping off the great and good to drink champagne and not watch the race. What does that say to the general fan, paying £300 to stand in the rain with an obscured view?

The real shame for me is that we both love F1, but neither of us would hurry again to spend £300 for a less good experience than we can have at home for free.

I don’t pretend to know what the answer is, but I wanted to share my thoughts.

Just throwing some things against the wall concerning NASCAR but besides the ticket prices aren’t there a couple of factors not mentioned. One is the shape of the cars, designed to resemble real cars, down to having decals to make it look like they have headlights. Scoff all you want, but there is a school of thought that this makes it more appealing to 51% of the potential viewing audience-women. They see these cars in traffic and they relate it to their life of going to work, shopping, taking kids to Little League.
Also is a company more likely to sponsor a car when the surface area is larger and gets noticed quicker when the camera is on it. Not to mention how the numbers are larger and this can create more identity and souvenir sales. Lots of famous NASCAR drivers are identified with the car number: Richard Petty with the 43, Jeff Gordon 24, Dale Earnhardt 3. I would be interesting to see how many fans show up at an F1 race wearing a drivers/team shirt as compared to NASCAR, soccer/football, NHL,etc

I suspect NASCAR attendances are suffering through the economic downturn, parts of the US are suffering badly and there is saturation coverage of NASCAR on tv – making live attendance less necessary than perhaps in past years. I also suspect an element of market saturation, 36 regular Cup races plus 2 non championship then Nationwide and Truck series as well. The latter are also very affordable to attend and offer most of the spectacle and often many of the top names, especially Nationwide.

I went to a Nationwide race last year at Charlotte and the spectacle was amazing, for $75 I got a full days track action, full track view plus I could see perfectly the pit lane and victory lane. The facilities were excellent which contrasted interestingly with my visit to Silverstone 2 months later where the new stands had been built at the start/finish but no-one had thought to increase the number of available toilets, it was appalling. That said though, Charlotte and Silverstone did have one thing in common – queues to leave the circuit! But in Charlotte a tram whisks you to and from your car….

Of course each has it’s own merits and there are great differences in both the sports and cultures they operate in. Although both are ruled fairly autocratically somehow NASCAR is that much more consultative with its fans, and therefore more human.

Tin-foil hat on: what if B.C. Ecclestone has exactly this in mind: force down the value of race tracks with astronomical hosting fees, and the buy the tracks to control an even larger part of the equation that is Formula One? Quite the bargaining tool: having the TV deals as well as the race tracks, and — slightly off-topic — a set of rules to govern GP1.

Great post Joe, lots to go through there.
Wouldn’t care to see BCE gather up tracks – but on that note, if one entity were to own several venues as you supposed, in the present give me, give me, give me, climate hate to think of the increased withholding influence he and his bidders could wield.

Great post Joe which has sparked some great debate. It’s certainly made me think about ticket prices especially. I enjoyed what, for me anyway, I believe to be F1’s best period – mid 80’s to early nineties. I used to go to several races a year and even on a relatively low salary was still able to comfortably indulge myself. At SPA in 1988, I remember I treated myself to the Eau Rouge grandstand and was able to witness Senna and Prost’s domination in the fantastic MP4/4 from the ultimate seat. The cost? circa £70! Yes, I’ll type that again; £70. I’d love to introduce my 10 year old to the sport that’s given me so much pleasure over the years however, the costs, even for general admission now, I believe are prohibitive. I’m sure you’ll be able to tell me exactly how much my seat at Eau Rough now costs and I’m convinced that it’ll be at least double (possibly tripple!) £70!!

If we completely ignore effects of exchange rates (Begium joined the Euro in 1999), VAT changes (Belgium’s VAT rate rose from 19% in 1988 to 21% today), and just consider inflation, then, using the data from the CIA World Factbook and 10 seconds in Excel, we find that that £70 in 1988 has increased, via Belgian inflation, to £113, or about €145.

So ‘at least double’ is what not far off what we’d actually expect from simple inflation at 2-3% per year.

However, the actual price of the grandstand seat (assuming an uncovered one, on race day, now called a ‘Gold 4’) is – according to spafrancorchamps.be – €390. so the price has increased almost 3-fold in addition to inflation – your £70 ticket is now a £300 ticket.

Hi Joe, hope all good. Just crossed the Millau Viaduct and (very belatedly indeed) second your views on that marvellous piece of engineering.

Re. your German economy piece not sure Moody’s have actually downgraded Germany as opposed to a warning that they might. Nevertheless it shows the almost impossible task promoters have when it comes to forking out insane fees to hold a race without the chance to recoup via anything other than tickets sales…

F1’s management has never believed in self-promotion of races from a central marketing budget but clearly that won’t last too much longer. Here’s to a future when a sensible F1 marketing department helps its race promoters put bums on seats. However large they might be…

I must echo the thoughts of others: the investors in F1 don’t give a fig about the future of the sport; they care about making as much money as possible in the short term. When the money from the sport eventually dries up they will move onto the next cash cow. So there’s no incentive for them to give their profits to anyone else in order to improve the future for teams or circuits or to improve the experience for fans.

The same goes for attracting new fans and young people: why would they spend money doing this, when the return for the investment is many years away? Bernie will be gone by then, as will the primary investors.

As a 25-year F1 fan this makes me very sad, as I’m sure it does most fans. I want my kids and grand kids (and me!) to be still watching F1 in 2050.
But who is going to change the way F1 is run?

Agree 100% – F1 has simply priced itself out of the market compared with other forms of motorsport. This year, for example, I’ve attended the F3/GT racing and the BTCC at Oulton Park (both with decent crowds, incidentally, particularly the BTCC) and will be attending the 6 Hours of Silverstone later this year with free grandstand seating – all for less than the price of a general admission ticket for the F1. 3 weekends of racing versus 1? No contest really. As you say, when you can catch the F1 on the TV with all the features you could want there’s no incentive to pay through the nose for a trackside view. Likewise, for German fans as Wilson Laidlaw says the competition from the DTM puts the F1 package firmly in perspective, so given the choice between the two most would likely go for the DTM.

Also agree with the comments that motorsport generally really needs to engage with a younger audience more – leaving aside the racing itself, most of the attractions at race weekends are aimed at quite young children and there’s little to keep teenagers et al interested. I’ve seen the odd simulator and that’s about it. It wouldn’t take much in the way of change to make it more appealing to that age group, but it could make one hell of a difference.

Are those official crowd figures Joe?
I was in the Sud Tribune in the arena section and I thought it was at least 75% full near the Sachs Curve and everything else around me seemed higher than that.
Can’t say what the Mercedes stand was like

Love the post Joe! I just looked at ticket prices for Austin this fall, $159 for general admission! That doesn’t take into the cost for flying, hotel, food, etc. At the same time, I could get WTCC tickets at Sonoma for $49. I could actually drive there, and I can guaranty that hotel will be cheaper.

Slight prob with the German banks being on hold for the 1 Trillion Euro owed through TARGET2 to their CB. (the interbank settlement system they effed up from get go)

My father was in Germany in the late 1920s. Read some books. I don’t want to hear the personal stories again. Talking prepubescents soliciting themselves for ~ literally ~ bread. Thankfully there were some different morals then, for some. But I wonder if it made any difference, always another . . If you think differently, look at the traffic stats on the Internet to what is carried. But, sometimes I wonder, as Zola wrote in Germinal, how those lost, ruined, physically broken, starved, maltreated, basically fornicated because they required the endorphins.

Try XXX rating. Not what Moody’s, Standard and Poors, how they apply the AAB minus on downgrade watch, as the bored actuarial usuals say. But I hope not. I pray not.

It is the rape of Europa without the war.

This most definitely does affect our lost man Grib, but he will be just forgotten.

I just have to add, that not well thought through reparations from Germany destroyed two generations. This may be the other way around, but the funny thing about money is it can be both ways around. I am scared.

Excellent article, but there are some problems with the proposed solutions. I have often written how BCE envies the position the France family finds themselves in, with the legal ability to own/control both the rule making body and track operators, without the invasive presence of the FIA, but there is no way this type of set-up would pass muster with the EC. Although,I thought BCE was going to attempt this when the Turkey race cratered, but he didn’t,so I imagine there was a good reason.

The other reason it wouldn’t work in F1 is that the duopoly of ISC & SMI (as well as Dover,as you know) is cushioned by the fact they are publicly traded companies with access to capital, something quite hard to come by for the locales in F1.

A step that would immediately help the non-CVC participants would be the recalculation of revenue distribution based on the “first dollar gross” principle, instead of how it was defended in the article titled “Why F1’s owners only end up with 30% of its revenues” probably by your favorite (unnamed) reporter,as posted on your favorite F1 website.

F1 is in the entertainment business, and successful participants in that industry receive revenue based on that calculation.

Great post Joe. The audiences at the track aren’t the only thing going down either. The TV figures for the German grand prix this year with Sky live and BBC highlights added together are 33% down on last year when BBC had it live. That’s also been a regular theme this season which doesn’t bode well for the future.

The teams cannot exist without sponsors, yet Bernie is steadily reducing the audience both at the tracks and on tv. It is true that he has increased the revenue for FOM and it’s owners. It makes little difference to him financially if anybody turns up to watch or not.

But it is not sustainable, soon sponsors will start to leave, many including RBS, must have a hard time justifying their presence in F1 which is one of the most expensive forms of promotion.

However I suppose F1 is the only regular, almost year round, sport to appear on tv, Bernie the FIA/FISA and co having effectively culled most other formulae from mainstream tv by devious (though completely legal at the time) means some years ago, the EU’s efforts at restoring competitiveness being very limited and too late.

However nothing is going to change until Bernie goes and the current owners are forced to think. the new CA will have to expire too, (if it ever gets to being singed by all parties.)

Then there is the LBL Delta Topco/Prefco shares have they been bought? If so by whom?

Lack of Fans ?
Yeah, thats right.
But also Lack of Celebrities in the Paddock.
That means that the important Lifestyle and Consumer Press, which could generate more Fans buying Tickets, has nothing to report about.
At some DTM Races (national german Series) you can see more Celebs than in a F1 Paddock.

What does it FOM cost to invite Personalities (e.g. german TV and Show Stars), to appear in the Paddock to feed the Yellow Press ?
Of course, there are a few Celebs in the Paddock.
But is this sufficient in times of the Crisis ?
Inviting Stars to an Event is a normal PR Tool for the Organizer.

i have no answers to offer, but you have absolutely nailed the problem. this year we debated at length the attendance of a gp – the desire is there but the costs don’t add up. some more detail if it’s of interest to anyone: http://sidepodcast.com/post/stay-at-home-mumms

at minimum, i think fans need easier and cheaper access to fanvision or fanvision-like devices. simply turning up and watching one corner’s worth of action, coupled with an over-eager tannoy announcer, doesn’t cut it anymore.

Didn’t think it looked that empty and certainly didn’t FEEL that empty when I was queuing for everything! So that is a shock…

Long essay: (username is for entertainment purposes only: disclaimer)

Certainly I think F1 could learn from NASCAR in some ways and I found the comparison a very interesting read. And yes, F1 is expensive, but have you seen the price of Glastonbury? And that is truly just entry to a field. At least F1 added tarmac.

You people moaning about mud etc and the “comfort” of TV…shame on you! Silverstone was horrendous. We queued for an entire day in the car. We got towed onto our campsite. Our tents leaked. We almost missed our flight back on Monday morning. But, but, but…it was fantastic. Because you can’t feel that noise reverberate through you if you watch on TV. You can’t smell it and you can’t get the true experience…(and you can’t see Fernando Alonso sat in a traffic jam 2 hours before the drivers parade, looking panicked). There are, as many comments state, problems with F1’s “image”, and that can cause a lot of this barrier seen today, the fan-driver barrier: because there are brainless guests on the grid, there is Rihanna hanging around, there is a random blonde that came 3rd on something TV related in 2006, yes. But there are also younger people like me (23 year old female who has never and will never read aforementioned 50 shades for reasons of pride and honour) who adore F1 for what it actually is: racing. Proper racing, on the limit, and elegantly so; which I would say NASCAR is not and will never be (sorry US of A…too much horsepower and no brain). NASCAR is, for me, similar to wrestling: great for spectating but you’ll never actually live and die for it. You have your entertainment and then it’s over. You spectate visibly, maybe, but it’s not a part of your life every other day of the week. You don’t pour over articles about diffusers and stretch your brain to understand, you don’t talk about Enzo and Niki Lauda having contract arguments in Maranello…there is no soul. F1 has that soul, that history, but people are being allowed to see it less. This, I believe, is more central to the problem than cost. Even the beautiful word Maranello makes me at least 2% happier on average per day. And I am a McLaren fan.

The F1 image I feel is (ironically) damaged by sponsors creating this barrier, putting the fan-driver connection in jeopardy. James Hunt, ok he switched cigarettes from a Rothmans to a Marlboro packet to keep them happy, but he never kowtowed to anyone with his personality. Just like Kimi doesn’t, almost the only one. Twitter is helping (I hear the older generation groan, don’t dismiss all) because no one can control JB’s cyber flirting with DC, but the problem, the barrier that has been created, yes some of it is price, but a lot of it is character. There is no Prost/Senna, no Piquet rudeness, no James having an inappropriate wee, no Niki Lauda rising from the dead…and not because it doesn’t exist, but because it isn’t allowed to be publicised. Seb gets close when he’s had a drink. Jenson has enough charisma to light a small town. Lewis deserves the yellow helmet. And Fernando Alonso at Ferrari has the makings of an all-time great pairing, talked about as legend in future years. Kimi is Kimi. But you have to get greatly interested to find this all out; you can’t just throw on the TV and see this part of the sport very well any more, get interested enough to buy those tickets. This barrier is what stops the fresh F1 ticket holders before they purchase. The connection is the part that takes a mildly interested younger person to the next level, what makes the difference between there only being those few absolute obsessives at races and there being a lot of reasonably well-up fans of all ages. This is what Fernando has done in Spain: maybe this year the economy has curtailed it, but he has made F1 no.2 to football. And Spain IS football.

Having said all that, if you can’t afford to take your kids then it doesn’t really make much difference. So a bit of both may help.

In a small way, I think Peter Windsor is doing a nice job of getting access to many racers (most of them from mid grid and lower series, many of whom we hardly ever hear much about in mainstream media) with his online show.

Likewise the FOTA fanforum thing is a nice idea, but it could be so much more. It could have people meeting with the stars all around the GP weekend, for example

Its small things like this that should be far more actively promoted and invested in by F1

It’s like the financial crisis and austerity – fewer fans means poorer facilities and higher ticket prices, which means fewer fans… FOM sell the TV rights to satellite broadcasters, which means fewer viewers (and race fans), so in a year or two SKY will have to charge more…

One part of the solution is for the teams to spend *much* less money – I’d put a ceiling of 50 million a year tops.

I don’t live near to any GP (from western Canada, Montreal is the closest), the costs would be quite high to attend (tickets + airfare) plus travel time and probably time off work, even though I could get free accomodation.

Mostly, I just don’t like to see a pretty good chunk of my money going to the Bernie/CVC group. That’s what turns me off from attending a GP. I’m happy to watch the races on tv and get the replays and commentary. I have to record most of the races (not getting up at 5am to watch live, not anymore anyways!), so I have a leisurely sunday morning, enjoying a hearty home cooked breakfast and watching F1 in my comfy pyjamas.

If I feel the need to ‘give back’ to the sport, I purchase items direct from my team’s online shop. Not cheap, but at least my money’s going more directly to my team and helping them, rather than help CVC pay it’s debts and getting Bernie a new private jet…

“The German Grand Prix was an interesting race, but what was most interesting (apart from the whereabouts of Bernie Ecclestone)”

This is interesting. And there is hardly a mention in the press, except for some choice remarks made by Daniel Amelung – Gerhard Gribkowsky’s lawyer.

I’d have thought CVC and some of the big F1 sponsors would be getting a bit edgy by now. This does not look good, to say the least. Will Bernie turn up in Hungary this weekend? Will an international arrest warrant be issued? Is it just a coincidence that Bernie has offered to pay for the Nurburgring GP next year, and fund a new race in London, just as questions are being asked about his financial affairs in Germany and Britain? Might a retirement be in the offing?

It is long past time there was a more professional, transparent, and accountable management of F1.

2008 Silverstone, Hamilton’s great victory in pouring rain. I didn’t pay for the tickets as they were supplied through a corporate deal but the seats were uncomfortable, no large TV screen facing us even though we were sat in the main grandstands on the pit straight. Tried to get Fan vision but that had sold out. Food was of atrocious quality for an exorbitant price. I will never go in person when ticket costs for decent seats are well above £300 per person.

I did also attend a test session there which was free (but no longer) and that was great. The sound and speed the cars carry through the corners just can’t be appreciated through the TV.

Second race attended was India last year and that was a complete shambles too. Roads leading to the circuit were unfinished, security who wouldn’t allow my elderly parents to take in water in a cool bag to keep insulin cooled, 1km walking to the granstand at ages 78 was extremely difficult for them but refused permission to bring the car inside to drop them off, but celebrities and other dignitaries allowed full access, car parking allocated nowhere near your seats, shuttle buses small, infrequent and dilapidate. My cost was roughly £140 for a 3-day pass which is affordable but still not value for money. We missed the start of the race because everyone arriving was funneled to the main gates and we had to abandon our driver and car to walk 4km to our seats.

And why? Because the roads had not been completed, my sister suggesting she would write to F1. I had to explain to her how FOM does not care about the fans, their only interest being how the wealthy are treated, how much the circuits pay to them and how they look on TV – the rest is not their focus.

So two races live and I’m not going back for more of the same – expensive, hassle and not good value – and all because the circuits have agreed to pay huge sums that they now need to recoup through fans.

I’ve managed to get to two races myself, both at Singapore. I could go to Melbourne just as easily, however as an Australian it is cheaper for me to see the race in SG than it is in Albert Park; so that says something about the price gouging by the hoteliers and airlines; but I digress. The race in SG was ok, the only downside was the commentary was so loud it drowned out the cars. Everyone says the noise is part of the show; I found the noise very annoying as it wasn’t from 24 v8s. What made it worse was the fact it wasn’t the BBC commentary team, it was the channel 10 (Australian) commentators. None of them know their earhole from their arsehole; the type of ‘journalist’ Joe likes I imagine. I could continue with the poor treatment those watching on TV in Australia receive but that is a rant for another topic.

Very skilfully you have answered your own question, Joe.
Plus the fact that few local Europeans from struggling countries could afford the fares, the tickets etc this year. Maybe the German crowd number wasn’t down at all, just no pilgrims. Seem to remember vast crowds of Tifosi there, other years, but not this year.

F1 events need to let kids under 15 in for free! They will buy programs, food, “T” shirts, lots, they will usually bring an adult or two. Better to have a full place and make it on the other side than have empty seating, grass banks. TV people tend to notice these things.

I would just like to mention that all this insanity started with certain Max Mosley selling the rights to F1 for 100 years. To his mate B.E.
For a pittance.
How was that for a rip off ?
“Martin”
one time F3 driver

I agree with you completely, especially since I live in Korea, the home of an F1 white elephant.
I, however, do not believe that anything will change until Mr. Ecclestone is convicted or leaves the sport.

F1 races are for rich Asian countries where Bernie does not care how many spectators turn up or how many people the government once massacred. Any country that cannot afford his fee does not deserve to host a race. I fully expect Syria to get a race soon.

Having been to a number of F1 races, I believe that part of the issue is that in the current “switched on” world, it is very difficult to actually know whats going on in the race. This dilutes the experience for many first time attendees. I would advocate a better on track experience for the punters. As a number of people have stated above, it makes more sense to watch it from home if you actually care about the result rather than the noise and the spectacle.

I believe a key factor of the malaise is the current revenue stream. The commerical rights holder is not incentivised to maximise on track attendence. The introduction of improved TV (and forthcoming “Bernie-net” internet streaming) mean that the rights holder will capture a greater share of revenues rather than growing the pie as I suspect they had thought. The F1 fan is not a bottomless pit of cash. Hence why under the current arrangement, you will only see on-track revenues decline further.

The only bright spot is if the FIA under Jean Todt can renegotiate the fee structure. I believe there have been some rumours that Jean is looking to do so. However, the teams will need to reign in their own greed.

I’ve maintained, for long, that F1 has managed to survive only due to the massive popularity and rich history which is a major incentive to everybody involved. The business model is rather poor and the current state of affairs, be it the organisers or the team’s, is not very pink. It’s always a huge risk, even when talking relatively. The Formula One group has grotesquely exploited the sport for a very long time now and how many teams and venues have we lost in the past decade? It’s just a terrible shame that the most watched sport in the world suffers from a unusual high attrition rate.

The big three teams are paid massive amounts of “historical value” money to keep them in it while also helping in dividing the almost useless FOTA. What baffles me though is, how are the organisers and teams not able to do anything about this for such a long time when it’s just one man calling the shot against a whole bunch of really smart & experience talented people!

How much money does a family pay to see baseball/basketball in the US? I haven’t been for years, too much $. I took my son to Indy 2000, great fun not too much $, stayed out of town. Now Austin, booked a VRBO place, with a contract, they raised the $ then emailed my reservation was cancelled (likely better offer) was going to cost me $2700 for 4 days, 2 people. I will miss the screaming engines, why don’t we hear that on TV except when Will is in the pit lane?, but can’t afford Bernie’s scalp and perhaps his divorce.
This first Austin race will be a sell out, but let’s wait till next year to see if it sticks… and this year is stunning, race wise.
I went to every early races
at Long Beach, great venue till the ‘beautiful people’ arrived and changed all accesses ….

I go to Toronto Maple Leaf hockey games perhaps a dozen times a season. They are one of the highest selling teams (claiming every game to hav been a sellout for something like 20 years) and, likely, one of the most expensive.

To sit fairly high in the arena costs $70 a ticket; a couple of times a season I sit about 20 feet from the ice for about $250.

Could the change in the circuit played a part in the low attendance figures? Ok yeh the ticket prices probably played the biggest part, it’s also been a while since they changed the layout and I do understand what you are saying, but this new track could really be anywhere.
The old Hockenheimring was such an iconic circuit that maybe, just maybe people would’ve been more willing to pay the price of a ticket.

Or maybe I’m still pissed that they changed it… The track usually provided interesting racing, just think what fun could have been had with DRS…

The price of F1 is that it got to hot for the bbc and that is why rupert murdock got his wish. I still believe that we as fans of F1 is in danger of losing all the european gp’s as the financial downturn is crippling europe and the financial world markets, the tickets are too expensive and no longer value for money, the merchindise is way too expensive for items with team logos which could be out of date by the following year,the teams want more money, the promoter wants more money ( eccles), the promoter tells the track management commitees that further investment must be made on curtain curcuits and spending money they dont have, the tickets go up and the fans dont turn up, its a never ending circle that just wont end and will get worse. F1 is a very expensive brand and the greedy boys will never allow it to be cheapened for the fans, as the fan base is where the money is.As the saying goes ” they cant see the woods for the trees”….

The problem is that the only thing that matters to them is the bottom line and their maths. Just like any commercial sport (football as the biggest example, even including the Olympics as another one), the people making the money do not care about the sport or the fans.

If places such as the 2 German tracks don’t want to do it, then a certain someone can still resort to places where money (or the whereabouts of it) is not analysed quite so much (such as the 3 or 4 other places he keeps naming hopefully).

As someone says above, keeping ticket prices high may be a win-win for such people: either the races stay there or are ‘forced’ to move to other places.

Passionate F1 fan of 25 years here – watches every single race (not always live) and collects all sorts of memorabilia.

I’ve been to two fantastic Grands Prix, but I don’t plan on attending another. Why? The costs are far too expensive. I went to Spa with GA tickets and drove with friends sharing a holiday cabin on a campsite. We had the best weekend ever, but the cost was the same as Mrs. Goat and I going for a week’s holiday to somewhere warm and Mediterranean.

Contrast that with all expenses of a week at Le Mans costing the same as the GA ticket and you can see why it just doesn’t make sense. We are a double income family, but cannot justify such an expense when there are so many other ways of spending that kind of money. With the lack of action between sessions and not too much going on inside the circuit, it wasn’t good value for money. Again, at Le Mans, there are museums, shops, food, a fairground and many other things to do around the circuit if you need to step away from the racing.

I’m happy to attend the ‘lower formulae’ to get my motorsport fix (as the access is much better anyway) if it saves money and stick to watching F1 on the TV. I see this as a vicious cycle for F1 if the costs keep going up and the fans stay away, and I think if the ticket prices were reduced, lots more would attend and I am sure that the economics of scale would mean that a way could be found to make some more money that way?

Joe, how is F1 owning tracks different from F1 paying for the London GP, a situation you said would not happen and should not happen because it would cause problems with other circuits who had to pay F1 for the privilege of hosting a race? Once F1 own tracks they are not going to charge themselves money to hold the races.

It is not very different, but the point I was making is that this is NOT going to happen with the current way of thinking. If I see F1 starting to buy the rights to Long Beach, run a London GP, acquire Hockenheim, Spa, the Nurburgring, Magny-Cours, Monza and Silverstone then I will start to believe it is possible, but at the moment I do not see that happening.

Thanks. But they’re trapped now aren’t they? By my count F1 has contracts until 2015 with at least 14 circuits – longer in some cases, with Silverstone still having years to run. If, for argument’s sake, they bought Spa and the ‘Ring in the next couple of years, now the noses of the contracted parties are going to be out of joint – though that could probably be straightened out by non-trivial amounts of money and new contracts. Which would have a non-trivial effect on the F1 Group’s cash and income projections.

Something MUST change in the future. Either F1 will implode and evaporate, or the business model will adapt to be more sustainable. The amount of $$$ that CVC sucks out of the sport is simply not sustainable in the long term…eventually something’s got to give.

developingcityblog, i know what you are saying but there are more ordinary people than there are extreamly wealthy ones, so strength in numbers,whats the point of having a sport for the rich only and not for everyone,there are not enough wealthy people interested in the sport only what they can get out of it,and ”look at me syndrome” how boring,ordinary fans watch the sport for what it is,whats the point of empty stadiums, better if they reduce the ticket prices and fill them up. Whats the point of taking the sport else where, very counter productive, the world championship started originaly in europe. If eccles takes it all to asia and the americas then the sport will die in europe. tv contracts will mean nothing and the european fan base will die a slow death all in the persuit of money, i know the sport runs on cash but this is the sorry state of the sport…..the promoters must remember when its gone its gone and may never return because motorsport legislations may change with the european parlliment and could be much more difficult to reinstitute in europe in the future, which is why eccles must look after the sport in europe now, this global brand must be made cheaper for everyone……..this is purely my own view not trying to be negative only the way i see it and maybe others too…..

Not saying I ‘disagree’ with you, but do you honestly think that any (1) rock solid F1 fan or (2) reasonably committed F1 fan, would ever say “there are no races in Germany or Spain or Belgium – those races are in Asia/Asia/America this year – so I don’t care about F1 anymore” ??

I would not say to myself ‘I do not agree with what Mr. Ecclestone has done with some European track contracts so I am not going to watch it’ !

As one F1 fan, I don’t wrap myself up in the morality of the sports I love, I just love them and follow them. There are politics BEHIND every single sport (except maybe lawn bowls) – but this is NOT politics, this is sport.

I’ve been an F1 fan for 20 years but to be honest with DRS and these silly tyres etc…this season I’ve just switched off and rarely bother. It’s not about Sky either because their production is great and I’ve got a subscription.

Races may seem more “competitive” but with the tyres and the gizmos…to me it just seems like more of a lucky lottery. I want real motorsport, not DRS passing and self destructing tyres. I find it dull.

I realised on Sunday afternoon that I derive more pleasure from reading your blog Joe than actually watching an F1 race. Judging from my friends, I’m not the only one either.

Apparently 142,000 for season opener, and at a quick glance DTM weekend ticket costs about a 3rd of what F1 weekend ticket does. Plus you get to see Coulthard and Schumacher fight for 14th place!

Its a shame because the facilities look first class – imagine Silverstone being able to put seating in like that from Club right through to the hairpin – it would be amazing (although out of business too)

I only wish Silverstone got the investment to put in the investment project with hotels etc and some big new grandstands. The one on the start/finish looks a bit lacking in my opinion.

The prices to go and see an F1 race is ludicrous! Look at Spa, a full weekend pass is close to 3K. Which in the current climate is an insane amount of money for the average punter, it is much cheaper and easier to sit back at home and watch the race in HD. That way, you get to see the full race, rather than a single corner.

I love F1, but I couldn’t stomach a full weekend of watching not a lot happen at a particular spot

Germany has not been downgraded, just warned: “The eurozone has been shaken today by rating agency Moody’s threat to downgrade Germany, the Netherlands and Luxembourg. Moody’s warned overnight that all three AAA nations are at growing risk from a Greek exit from the euro, or a bailout for Spain and Italy. All three countries are now on negative outlook.” Source: The Guardian.

For the record: it was Michelin tyres which failed at Indy, not Goodyear.

Owning circuits: Hasn’t FOM/Bernie actually promoted the race at Hockenheim for the past few years after it first got into trouble ?

For the record: as Titus Pollo was clearly referring to NASCAR (as to why Indy is only half-full for the Brickyard 400 these days) when mentioning the Goodyear tyre failures of 2008, their statement was correct. In that instance, the failure was that the tyres were simply wearing out after only a dozen laps or so of running the oval at speed.

For the record, it was Max Mosley that orchestrated the tire fiasco at Indy in order to push his political agenda.

Yes, Michelin had an issue, but all major racing series have had tire issues from time to time. None but F1 have ever stood by and watched their series burn. We should all be thankful that F1’s “Nero” was pushed out.

I was at Sunday’s race and have been surprised to read since that it was less than half-full. Granted, I was in the Mercedes stand looking away from the stadium section, but the Mercedes stand appeared 100% full to me, and when we walked on the circuit afterwards into the stadium section, even an hour after the race the seating still appeared about half-full then.

On the other hand, for the privilege of watching Sunday’s race (i.e., just the race itself, not a weekend ticket) I paid 269 Euros.

That’s 269 Euros for what amounted to a 90-minute race. Sure, there are support races but I reckon less than 0.5% of the fans (if any) bought tickets to watch the Porsche Supercup race. And i can tell you that virtually nobody was watching the GP3 race.

Add in the fuel costs for about 8hrs in the car.

I think 100 Euros would have been a fairer price for the ticket. In other words, in my opinion I think I’ve been charged 2.5x what I feel I should have been asked to pay.

I was at Germany and saw it first hand. The fans have already spoke, they are doing so more and more with their feet. I don’t think we can blame everything on the recession.

FOM is bleeding F1 dry but that is their nature. There are only two entities that can influence FOM: the FIA and Ferrari. If these two have not negotiated a better Concord agreement for all parties then they are to blame.

I love motorsport. Always have, always will. However I have to say as a spectator whilst it’s always great to go to an event to hear the cars and smell the fumes, it’s a lot harder to grasp the story that is unfolding before you during a race from the stands than it is at home.

I wonder if that is part of the success of Nascar, particularly on the short tracks. You can see everything happening. You can understand the story.

I was at turn 3 at Melbourne this year. Without my iPad with F1 timing app loaded and the Kangaroo TV I’d hired, my “story” would have been a few seconds of the cars going passed every minute or so.

I’ve been banging this drum from quite some time, and every few years the renewal of the concorde agreement gives us all hope someone will wake up and smell the roses.

CVC and BE own the rights to the brand F1, Formula1 (and some other stuff). They have been paid back multiple times over the price they acquired this for – which was as pointed out above a dodgy Max and Bernie deal. A deal the FIA should strike out for collusion or whatever their lawyers decide. 99 years for $1m a year???

Possession is 9/10th’s….well lack of possession is probably too….

So the FIA won’t act. Then what about the teams? Set up a franchise model (like another NA sport). Call it World GP Championship – FLibre (who cares). 12 owners, a constitution, a vote per franchise. Franchises can be sold on.

Franchise group appoints a regulatory body, commercial development company to drive revenues. Have a transparent share of revenue for the franchises – based upon previous year performance (like most sports).

And….oh that’s pretty much it. Resulting in:-

Fans pay less,
tracks earn a crust,
Free to air TV pays a fair price,
teams get more
and
$750m-$1bn a year doesn’t go to an investment bank and their cronies.

Motorsports will survive without F1, it will likely even flourish, if it comes to that.

Time will tell whether F1’s many incongruencies align to assure its demise – the camel’s back must break before we know which straw was the final one. The real mystery is why those that have power inside the sport seem willing to put the camel’s back to the test.

The impression I get as a casual F1 fan is that the F1 industry seems to be built around getting the most amount of money out every possible aspect of the sport as quickly as possible. I don’t see the people that run F1 putting long term investment into it and this shows in a number of ways.

Tracks: Tracks are constantly fighting to be able to pay the exorbitant licensing fees and seem to constantly struggle to meet their yearly commitments, sometimes right up to a few months before the race! Local governments often get no incentive to host an F1 event and more often than not have to fork over their own money to support the infrastructure of an F1 event. Tracks are not incentivised to want to become an F1 venue… rich people that own tracks are. No F1 money goes back to the tracks so that’s why when you go to a race you’ll see lots of fresh paint on those old grandstands.

Teams: The inner workings of individual teams always seems a bit murky as people move from one team to another and the teams themselves change due to re-branding or change of ownership. Everyone that pays the most money wants to put their name at the top and put their guy in charge. The result of this is that I find it hard to develop loyalty to teams when you need a scorecard to determine who’s who and what’s what and that detracts from my passion for the sport.

Cars: I don’t really have much issue with the cars as they continue to evolve. People complain about how sanitized racing is these days but that’s a pile of crap. I’d rather have sanitized racing than have the number of deaths we had in the 70’s and 80’s. I’d like to see more practical innovation on cars and less gimmickry with aero and exhaust timings. KERS isn’t sexy but it’s cool technology. DRS is a trick to make the racing more exciting. Maybe next we can have a loop-de-loop. I’ve heard it said by many that F1 cars are little more than hopped up go-karts. I know this isn’t true because there’s so much money and innovation being spent it’s not even a apples to apples comparison. Then again, how come so many F1 drivers come from racing go-karts? 🙂

Management: Is it me or does Bernie Ecclestone look like the pharaoh that is trying his hardest to surround himself with enormous amounts of wealth so he can take it all with him to the afterlife? I don’t get any feeling that Bernie has the long term interest of the sport in mind. Perhaps this is the influence of other fans and the media but that’s the impression I get. I see his remarks about “Venue X better pay up our money or we’ll skip them” to be brinksmanship and while it might be effective at getting tracks to kowtow it does an even better job of alienating fans that probably feel more loyalty to a the tracks than the teams that race on them.

Entertainment: Everyone knows you’ll get a better overall viewing experience when you watch a race on TV than when you go in person. The only reason to go to a race is because, quite simply, you love racing. If I go to a race it’s because I want to see it, hear it, smell it. It’s a sensory experience and if you have any sort of passion for cars at all you know what I mean. F1 has priced itself out of reach for the average person. Your $200 ticket prices often includes nothing but the ability to get through the gate and a guaranteed seat. You will pay easily that for parking/food/lodging. For $200 I can rent a car and do some laps on the Nurburgring Nordschleife and have money enough left for a steak dinner. F1 has always been the sport of aristocracy and it doesn’t seem to want to change that perception any time soon.

This being said I still find it a fascinating sport, but it’s not one for which I am passionate.. I’m finding a lot more draw in Le Mans racing these days as the drivers/teams/races seem to be more about the racing and less about the ‘show’.

59,000 ticket sales at an average cost of 250EUR (ave given the range 80-3000) equates to just short of 14M EUR, so quite close to what we are lead to believe is the race sanctioning fee. I would imagine the track breaks even on ticket sales alone.

Add to that the fees Mercedes will have paid for the excellent event they held over the weekend at the Mercedes stand, plus the revenue from on track retailers, I would estimate the circuit brings in 1-2M EUR revenue from the event.

This excludes the fringe benefits to surrounding towns and local business. I’m not saying the F1 business model for circuits works everywhere, but in Germany, specifically Hockenheim, it remains viable.

The future may be lower ticket prices for general access, but most European circuits would require substantial developments in terms of infrastructure to support higher attendance. With lower ticket prices the payback on these investments would be very long which begs the question why do it?

The sanctioning fee for an F1 race is high, but I don’t see why we should bemoan the FOM and Bernie because they are good at their job.

Just adding to the same opinions. I am going to my second gp after following the sport since 1992. Im off to Spa. A gp weekend for me costs around €1500 with travel and accommodation and tickets ( i live in Norway). I want to go to a racing event every year (and bring my 6year old son) but with the F1 prices it’s not going to happen. I try to get him interested on TV but he’s just not interested.

Next year I’m thinking of either World Series by Renault or DTM/BTCC events. Much more affordable and as a guy above mentioned – you feel wanted to come and see.

With WSbR you can print out free tickets (restricted to four) but in Moscow the show attracted 120.000 crowd.

I recently spent a weekend at Mosport (CTMP) for the ALMS event and was quite pleased to see that the families are back. Kid’s 12 and under are FREE and a discount for those under 16. I talked to many of the families at corner 2 on race day and more then one father mentioned how they loved coming to the track when they were kids and had great memories of hanging out with their fathers, camping under the stars… many looked like a tear or two was forming recalling those days. And now, here in 2012, they were passing on those experiences to their children just as I have done with my now 23 year old daughter who against my wishes wants to race motorcycles, (her mother blames ME!). My point here is that this is how you maintain your fan base – transferring the excitement of motorcar racing from generation to generation. I’m betting that many of these children I saw at the race will be back as teenagers and later as parents bringing their own children. This is what F1 lacks because of it’s attitude toward being the ‘elite’ of racing and it’s high fan costs and for lack of a better phrase, becoming ‘anti-family’.

Me and my mates travelled by bus from Sweden and stayed in the nearby city called Worms.

The bus transfers to the track worked flawlessly and we were actually surprised at how cheep we got away with the bus, hotel and eating/drinking at the track. But the tickets and the official F1-gear on the other hand were really expensive.

But I think the problem is that the organizers does not provide the fans with enough excitement and information. Its not enough to sit in a seat and marvel at how loud the cars are for three days. We need information about what is happening on and off the track during the GP weekend.
It was fascinating seeing the cars roar past us during the race but we did not really know what was happening.
And I think the only F1 fans who did not know about the RedBull engine mapping controversy on Sunday morning were the ones who were at the GP struggling with internet access on their smartphones due to overloaded carriers.

When we got home it felt a bit like I had missed a GP-weekend.

I think organizers need to work hard to keep the fans informed. Maybe screens with info about what is happening and why or give fans some simple device with live timing, newsfeeds and bbc/sky commentary.

You mean something like Fanvision? Formally Kangaroo TV? available for 45EUR on race day or 75EUR for the weekend…. that would be a great idea! If only there were 4 rental locations around the track, inlcuding in the F1 village and the Mercedes Benz area.

No, a 75EUR addon is not at all what I meant. Quite the opposite actually!

I want the organizers to try hard to give a great experience to all the fans. Now it seems they only try to sell you a plastic chair which happens to be located near a racetrack.

I have tried the Fanvision and Fanvisions for everyone is probably not doable, nor is it necessary. I meant a simple device, but maybe include free WiFi and a smartfone-app in the ticket could be one way to keep the fans informed. Give us more info and eduction at the track.

Sorry if my post was unclear but its not about the electronic devices, its about the commitment from the organizers.

Your report elucidated the different economies of Nascar and Formula One. Might I add, that it is then very likely, the problem with Formula One, in addition to the misaligned interests you describe, is the rights holder, Bernie Ecclestone, under the like-minded greedy tutelage of his private equity helpmates, that is sucking the economic breath out of their sport, python-like, to provide ROI to ever more leveraged valuations. Thus, the rest of the F1 family is dressed in rags.

Second, thanks for confirming that ‘ol Bernie chose not to make the trip to Germany. Woo hoo, he’s running from the cops.

But, would the Formula One Group be as interested in providing for general fans, or would it want to continue to ensure a certain level of well heeled attendants?

I would say one thing that definitely helps NASCAR is the desire to keep the tracks profitable since the management does have a vested interest in the fiscal health of the facilities. But one of the other advantages that NASCAR tracks, have over many F1 tracks is the ability to park thousands of campers in the infield or adjacent to the track, thereby reducing some of the costs of attendance. Only Spa, maybe Hungary, the German locations, Silverstone, and IMS seemed to have that as an option.